A $1.25 billion (€1.06 billion) share sale at a subsidiary of South Korean family-owned conglomerate Hyundai has flopped, potentially stalling succession between the second and third generations.

Despite a discount on the share price of up to 12%, the Chung family failed to reduce its 43% in Hyundai Glovis, the group’s logistics subsidiary.

Analysts believe there were two motivating factors behind the block deal: to overcome new tax laws; and to provide heir apparent Chung Eui-sun, 44, the funds to foot a 50% tax bill when he inherits control of the business.

It has been widely reported that the younger Chung wishes to increase his stake in Hyundai Mobis that acts as the unofficial holding company for the group.

The younger Chung is currently vice-chairman of Hyundai Motors, while his father, second-gen Chung Mong-koo, 77, is chairman.

Antitrust laws introduced in February last year require South Korean families to pay extra tax when companies in which they own more than 30% of stock benefit from intra-group deals. The Chung family wanted to reduce its stake to 29.99%.

Hyundai says it has no current plans to revive the share sale.

Chaebol, the country’s family-owned conglomerates, suffer a bad reputation, largely because of their anti-competitive nature, which flourishes in their complex ownership structures.

South Korean president Park Geun-hye, who assumed office in early 2013, made an election pledge to crack down on corruption among the family-owned corporations.

Chaebol have come under the spotlight in the last month due to an outburst from Hanjin Group third-gen Heather Cho, who urged a Korean Air flight to return to the dock when she was served macadamia nuts in a bag rather than on a plate.

Her behaviour was seen as emblematic of the sense of entitlement felt by many chaebol next gens.